Qinetiq Group Plc · LSE:QQ.
Qinetiq — H1 FY26 Earnings Presentation
43 slides from Qinetiq's earnings presentation, Nov 13, 2025
Slide 1: Taken action to drive short-term performance and long-term growth
Taken action to drive short-term performance and long-term growth QinetiQ Group plc Interim results for half year ended 30 September 2025 13 November 2025
Slide 2: Headlines
Headlines Tough near-term market with robust operational 1 performance and US restructuring on-track Highly relevant capabilities in a growing market gives 2 good visibility of long-term growth Full year guidance unchanged with continued 3 discipline on capital deployment Well positioned for increas
Slide 3: Agenda
Agenda 1 Half year in review Steve Wadey – Group CEO 2 Financial results Martin Cooper – Group CFO 3 Strategic outlook Steve Wadey – Group CEO 4 Q&A 4 Interim results for half year ended 30 September 2025 | 13 November 2025 | ©
Slide 4: Half year in review
Half year in review Steve Wadey Group Chief Executive Officer
Slide 5: Half year in review
Half year in review H1 FY26 • Good progress on US restructuring and improvement actions Orders Revenue • Robust financial performance in tough near-term markets £2,416.5m +134% £900.4m -5% 0.9x book-to-bill3 -3% organic • Delays to UK framework orders; priority major programmes H1 FY25: £1,034.8m H1
Slide 6: EMEA Services
EMEA Services Tough near-term market conditions Successful delivery of long-term contracts • Revenue flat with good margin performance • Strong milestone delivery performance across EDP • Good backlog execution; UK grew 2% due to order delays • T&E Innovation Gateway to attract SMEs and new entrants
Slide 7: Global Solutions
Global Solutions Addressing market and operational challenges US strategy focused on differentiated capabilities • Disposal of US Fed IT business and headcount resizing • Space & missile defence, maritime, sensors, persistent ISR • Revenue declined with lower margin performance • US secured $290m fu
Slide 8: Financial results
Financial results Martin Cooper Group Chief Financial Officer
Slide 9: Half Year Summary Financials
Half Year Summary Financials Significant Near-term market Margin on Good cash Increased backlog challenges & US track for FY generation returns restructuring Order Intake Revenue Op’ Profit Cash Dividend & 1 £2,416.5m £900.4m £96.0m Conversion Buyback 134% (5)% (10)% 85% £100.5m H1 FY25: £1,034.8m H
Slide 10: Record order intake with book-to-bill 0.9x
Record order intake with book-to-bill 0.9x 1 Orders (£m) Orders won (£m) 140% organic growth 134% total growth 2,501 84 1,034.8 (266.5) 1,709.4 (31.6) (29.6) 2,416.5 1,417 1,709 1,096 464 61 344 565 272 609 470 435 H1 FY24 H1 FY25 H1 FY26 2 Orders less than £5m Orders greater than £5m LTPA Extension
Slide 11: Revenue growth impacted by market conditions, orders timing & US restructuring
Revenue growth impacted by market conditions, orders timing & US restructuring Revenue (£m) 3% organic decline 5% total decline 98% Revenue visibility for FY 946.8 (6.2) (23.2) (17.0) 900.4 89% 2% 7% 100% Revenue Period 7 Identifiable Further FY Forecast cover @ H1 awards awards awards H2 revenue co
Slide 12: Margin progression in line with FY guidance
Margin progression in line with FY guidance Underlying operating profit from segments (£m) 10% organic decline 10% total decline H1 H1 FY26 FY25 106.6 (1.2) (0.1) £m £m (9.3) 96.0 Operating profit from segments 96.0 106.6 RDEC Income 14.8 12.6 Underlying operating profit before tax 110.8 119.2 Digit
Slide 13: EMEA Services
EMEA Services H1 FY26 H1 FY25 Orders (£m) £m £m % change 2,169 Orders 2,169.1 730.4 197% Revenue 708.3 717.8 (1)% 1,709 730 Underlying operating profit 81.7 82.9 (1)% 631 Underlying operating profit margin 11.5% 11.5% (0)% 460 Book to bill ratio¹ 0.8x 1.2x (36)% H1 FY24 H1 FY25 H1 FY26 Total funded
Slide 14: Global Solutions
Global Solutions H1 FY26 H1 FY25 Orders (£m) £m £m % change Orders 247.4 304.4 (19)% 464 61 84 Revenue 192.1 229.0 (16)% 322 304 Underlying operating profit 14.3 23.7 (40)% 247 Underlying operating profit margin 7.4% 10.3% (28)% H1 FY24 H1 FY25 H1 FY26 Book to bill ratio 1.3x 1.3x (3)% Revenue (£m)
Slide 15: Strong cash generation
Strong cash generation Cash generation (£m) 85% cash conversion 96.0 14.8 39.2 150.0 (28.6) 6.5 127.9 (36.4) 91.5 Underlying RDEC¹ Depreciation & Underlying EBITDA Underlying working Other² Underlying net cash Net capex Underlying net cash operating profit amortisation capital movement inflow from i
Slide 16: Strong balance sheet supporting shareholder returns
Strong balance sheet supporting shareholder returns Change in net debt (£m) £100.5m shareholder returns 91.5 (7.0) (21.1) 63.4 (32.8) (67.7) 17.9 (27.5) (1.0) (47.7) 2 Leverage 0.6x Net Debt £180.9m Underlying Net Net interest Taxation Free cash flow Dividends Share buyback Disposal of Exceptional O
Slide 17: Disciplined capital allocation
Disciplined capital allocation • Progressive dividend growth of 7%, with interim Capital allocation policy dividend at 3.0p • Average number of shares for H1 FY25 as used in EPS calculation reduced to 541.9m (H1 FY26: 569.1m ) Invest in our organic Return excess cash 573.2 575.9 577.0 563.4 541.9 gr
Slide 18: FY26 Guidance
FY26 Guidance FY25 FY26 c.3% organic Revenue £1.9bn growth FX headwind and disposal of Federal IT Business Profit margin 9.6% c.11.0% Operating cash 105% c.90% Continued good cash generation conversion¹ Underlying EPS 26.1p 15-20% growth Margin recovery and share buy-back Near-term markets remain ch
Slide 19: Strategic outlook
Strategic outlook Steve Wadey Group Chief Executive Officer
Slide 20: Differentiated company highly relevant to increasing threat
Differentiated company highly relevant to increasing threat Threat driving market dynamics R&D for technological superiority Engineering services accelerating capability 17% • NATO increasing spend to 3.5% of GDP 32% • Defence reform and greater competition • New technology scaling at wartime pace •
Slide 21: Driving partnering and innovation to create competitive advantage
Driving partnering and innovation to create competitive advantage Government Industry Investment • Strategic partner to UK across HMG • EDP expanded with KBR / FNC, 25% • Successfully transitioned to new and 4th largest defence supplier SMEs and skills augmented by AI digital platform in UK and Aust
Slide 22: Growing our domestic markets through focus on mission critical capabilities
Growing our domestic markets through focus on mission critical capabilities EMEA Services Global Solutions • DroneWorks launched to accelerate drone development • Significant on-contract growth with SCO, TARS and SDA • New award for next generation laser weapon technology • Capabilities aligned with
Slide 23: Expanding internationally by leveraging our core capabilities
Expanding internationally by leveraging our core capabilities AUKUS nations European NATO and allies • Technology sharing on Australia and UK laser weapons • Growing use of UK test & training e.g. Germany and Japan • Exchanging experience across future EDP and MSP • Exporting EW and mission data for
Slide 24: Significant £4.8bn backlog plus £11bn+ pipeline underpins future growth
Significant £4.8bn backlog1 plus £11bn+ pipeline underpins future growth Grow domestic programmes and opportunities Expand internationally ACE Home Office digital innovation delivery partner Laser weapon technology £100m+ MSP Engineering delivery partner for defence DragonFire / TEAL Laser directed
Slide 25: Summary
Summary Steve Wadey Group Chief Executive Officer
Slide 26: Summary
Summary Financial performance Tough near-term market with robust operational 1 Revenue1 £bn Backlog £bn performance and US restructuring on-track 2.6x2 Highly relevant capabilities in a growing market gives 2 good visibility of long-term growth Full year guidance unchanged with continued 1.7x 3 disc
Slide 27: Q&A
COMMERCIAL IN CONFIDENCE Q&A 28 Interim results for half year ended 30 September 2025 | 13 November 2025 | © COMMERCIAL IN CONFIDENCE
Slide 28: Appendix
Appendix
Slide 29: Glossary
Glossary Term Definition Term Definition ACE Accelerated Capability Environment NCSISS Naval Combat Systems Integration Support Service ATS Aerial Target Systems NGGATS Next Generation German Aerial Training Services AUKUS Australia, United Kingdom, United States NSOIT National Security Online Infor
Slide 30: Purpose driven strategy aligned to AUKUS nations and NATO allies
Purpose driven strategy aligned to AUKUS nations and NATO allies Protecting lives by serving the national security interests of our customers Invest in core Grow in core Expand across Drive innovation and capabilities markets markets partnering High-value and differentiated Enable critical national
Slide 31: Definitions
Definitions • Underlying performance is stated before: – Amortisation of intangibles arising from acquisitions – Pension net finance income – Gains/(losses) on disposal of businesses, investments and property – Transaction, integration and one-off remuneration costs in respect of business acquisitio
Slide 32: Additional technical guidance
Additional technical guidance FY25 FY26 Underlying net finance expense £16.8m Effective tax rate1 12.8% Tax cash outflow £48.6m Capital expenditure £108.4m Leverage 0.4x Share buy-back £102.9m 1 Illustrative tax rate to reflect RDEC credit included in the tax line (to be used on Underlying Operating
Slide 33: Revenue by customer and country
Revenue by customer and country Revenue by customer (%) Revenue by destination country (%) H1 FY26 H1 FY25 H1 FY26 H1 FY25 £900.4m £946.8m £900.4m £946.8m % % % % MOD 59% MOD 56% UK 71% UK 66% DoW 10% DoW 8% US 16% US 18% Government agencies 16% Government agencies 22% Australia 6% Australia 9% Defe
Slide 34: Income statement including specific adjusting items
Income statement including specific adjusting items* H1 FY26 H1 FY25 £m £m Operating profit from segments 96.0 106.6 RDEC Income 14.8 12.6 Underlying operating profit before tax 110.8 119.2 Amortisation of intangible assets arising from acquisitions (11.6) (12.1) Digital investment (12.1) (9.9) Acqu
Slide 35: Impact of foreign exchange translation
Impact of foreign exchange translation H1 FY26 Restated at H1 FY25 FX FY25 FX H1 FY26 H1 FY25 FY25 rates headwind headwind £m £m £m £m % Orders 707.1 1,034.8 719.8 (12.7) (1.2%) Revenue 900.4 946.8 910.8 (10.4) (1.1%) Underlying* operating profit 96.0 106.6 96.1 (0.1) (0.1%) • Key driver of FX chang
Slide 36: Understanding our different underlying profit and tax rates
Understanding our different underlying profit and tax rates H1 FY26 H1 FY25 £m £m Operating profit from segments 96.0 106.6 RDEC income 14.8 12.6 Underlying operating profit* 110.8 119.2 Underlying tax charge* 25.4 30.1 Tax income on other specific adjusting items (6.4) (6.6) Headline tax charge 19.
Slide 37: Underlying earnings per share (pence)
Underlying earnings per share (pence) 14.2 0.7 (1.3) 0.3 (0.1) 0.4 14.2 H1 FY25 Change in Operating profit from RDEC¹ Net finance Effective tax rate H1 FY26 Underlying number of segments¹ expense¹ Underlying EPS shares EPS 1 Post-tax 38 Interim results for half year ended 30 September 2025 | 13 Nove
Slide 38: Cash conversion
Cash conversion H1 FY26 H1 FY25 £m £m Operating profit from segments 96.0 106.6 Underlying RDEC income 14.8 12.6 Underlying operating profit 110.8 119.2 Depreciation and amortisation 39.2 36.9 EBITDA 150.0 156.1 Underlying changes in working capital (28.6) (32.4) Underlying profit on disposal of PPE
Slide 39: Movements in net debt
Movements in net debt H1 FY26 H1 FY25 £m £m Free cash flow 63.4 47.2 Dividends (32.8) (32.2) Disposal of business and acquisitions 17.9 (0.2) Acquisition & disposal costs (1.3) (2.9) Digital investment (12.1) (9.9) Restructuring costs and other impacts (14.1) - Purchase of own shares (73.2) (46.2) O
Slide 40: Balance sheet
Balance sheet H1 FY26 FY25 £m £m Goodwill 233.3 249.8 Intangible assets 265.6 293.9 Property, plant and equipment 454.9 473.3 Working capital (118.2) (146.8) Net pension asset (net of deferred tax) 30.8 24.8 Other assets and liabilities (126.7) (135.3) Net debt (180.9) (133.2) Net assets 558.8 626.5
Slide 41: Net pension asset
Net pension asset H1 FY26 FY25 £m £m Equities 10.1 11.2 LDI investment 401.2 351.1 Asset backed security investments 77.1 75.0 Bonds 285.3 326.7 Cash and cash equivalents 22.1 46.1 Derivatives 1.2 10.9 Insurance buy-in policies 454.1 450.7 Borrowings (70.0) (95.0) Market value of assets 1,181.1 1,17
Slide 42: Share buy-back programme
Share buy-back programme The £100m share buy-back programme announced on the 16th January 2024 completed in 1 February 2025 The additional £50m share buy-back programme announced on the 14th November 2024 completed 2 in May 2025 The £200m share buy-back programme announced on the 17th March 2025 is
Slide 43: 44 Interim results for half year ended 30 September 2025 | 13 November 2025
This presentation contains the following imagery: Slide 1 (Image 1: BAE Systems ©), Slide 3 (Image 1: UK MOD © Crown Copyright 2025), (Image 3: UK MOD © Crown Copyright 2025), Slide 7 (Image 2: UK MOD © Crown Copyright 2021), (Image 4: UK MOD © Crown Copyright 2025), Slide 8 (Image 2: US Customs and